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Sri Lanka, Mexico and Kenya boast best value in 2010

Thailand has lost its long-standing best value rating to Sri Lanka in Post Office Travel Money’s new Long Haul Holiday Report for 2010. On top of a turbulent year for Thai tourism, the Far East favourite slid to fifth place in the Post Office Holiday Costs Barometer after prices rose 18 per cent. Instead, the report found that UK tourists looking to save money should head to Sri Lanka or runners-up Mexico and Kenya.

The strengthening of the Thai baht - now worth 12.7 per cent more than last September - was to blame for the higher costs in Phuket, rather than resort price hikes. Local prices rose by just three per cent, according to the Post Office research.

Sri Lanka emerges as clear winner in the barometer. At £47.54 for a ‘basket’ of 10 tourist items including meals and drinks, prices were nine per cent lower than in Thailand and over two-thirds less than in Australia, most expensive of 22 destinations surveyed. UK visits to Sri Lanka are already on a high - up 51 per cent year on year in July - and a combination of low-cost packages and resort prices should boost visitor numbers in the coming months.

Runners-up Mexico and Kenya, which both eclipsed last year’s top three - Thailand, Malaysia and Bali - in the barometer, have reasons to be cheerful too. Post Office sales of the Mexican peso are already up five per cent compared with last year and the direct British Airways service to Cancun launching this autumn makes a rise in winter sun bookings likely as Mexico becomes more easily accessible from the UK.

Two years on, Kenya has recovered from the tourism slump caused by election riots. The Kenya Tourism Board has announced a seven per cent jump in UK visitors4 and the Post Office said that an 11 per cent rise in sales has made the Kenyan shilling its 2010’s third fastest growing currency. Kenya is also the only long haul destination where sterling is worth more (+0.7 per cent) than a year ago and the Post Office barometer suggests that resorts are cost-cutting as prices are down seven per cent.

Malaysia (4th) and Indonesia (6th) complete a top six significantly cheaper than other long haul destinations surveyed (less than half the cost of the seven most expensive countries). They were also cheaper than the main European winter sun competitors.

Sterling’s slide against the South African rand and restaurant price hikes means that tourists visiting Cape Town, previously rated a Post Office best buy, can expect to pay a third more this year. As a result the country dropped from sixth to eighth in the barometer. Rand sales also dropped 26 per cent over the summer, suggesting that the World Cup has not yet stimulated the expected upturn in holiday bookings.

In a surprise result, Dubai, a new addition to the Post Office report and with a reputation as a high-priced destination, has beaten competitor Egypt to emerge as a cheaper option for UK travellers looking for a mid-haul holiday. At £81.59 for the 10 tourist items, Dubai was 6.7 per cent cheaper than Egypt, traditionally thought of as good value for money but where prices have risen 37 per cent over the past year.

Across the Atlantic, prices have risen 34 per cent in Miami, mostly because of the increased cost of eating out, and are also up, by a more modest eight per cent, in Jamaica, cheapest of three Caribbean islands surveyed.

Sarah Munro, Post Office Head of Travel Money, said: "Price as always remains the big issue and it is good news to see so many long haul destinations with low resort costs. It means that UK tourists planning winter sun trips will be spoilt for choice.

"The information we have collected shows that Sri Lanka and Mexico offer excellent value for money and, despite having a troubled year, tourists should not write Thailand off. The Thai baht may have strengthened against sterling but tourist prices remain low and there are likely to be great deals to the country as hoteliers and airlines look to continue to attract international visitors.

"However, in these uncertain times UK holidaymakers should plan trips carefully and ensure they are fully protected. A package taken with a well-established and ATOL protected tour operator, together with comprehensive travel insurance is probably the safest bet. People should also avoid wasting cash through last minute airport currency purchases and can cut costs abroad by using a credit card like the Post Office card that offers 0 per cent commission on purchases overseas."